eyeQ: Rolls-Royce and two other stocks for your radar
interactive investor has teamed up with the experts at eyeQ who use artificial intelligence and their own smart machine to analyse macro conditions and generate actionable trading signals. Here’s what it says about these defence stocks.
15th April 2024 10:59
by Huw Roberts from eyeQ
"Our signals are crafted through macro-valuation, trend analysis, and meticulous back-testing. This combination ensures a comprehensive evaluation of an asset's value, market conditions, and historical performance." eyeQ
- Discover: eyeQ analysis explained | eyeQ: our smart machine in action | Glossary
Rolls-Royce
Trading signal: long-term strategic model
Macro relevance: 36%
Model Fair Value: 437.30p
Fair Value Gap: -6.92% discount to model value
BAE Systems
Trading signal:long-term strategic model
Macro relevance: 51%
Model Fair Value: 1336.72p
Fair Value Gap: -2.67% discount to model value
Babcock International
Trading signal:long-term strategic model
Macro relevance: 22%
Model Fair Value: 553.80p
Fair Value Gap: -8.37% discount to model value
Data correct as at 15 April 2024. Please click glossary for explanation of terms.
Here are some definitions of useful terms used in this video:
Model value
Where our smart machine calculates that any stock market index, singe stock or exchange-traded fund (ETF) should be priced (the fair value) given the overall macroeconomic environment.
Model relevance
How confident we are in the model value. The higher the number the better! Above 65% means the macro environment is critical, so any valuation signals carry strong weight. Below 65%, we deem that something other than macro is driving the price.
Fair Value Gap (FVG)
The difference between our model value (fair value) and where the price currently is. A positive Fair Value Gap means the security is above the model value, which we refer to as “rich”. A negative FVG means that it's cheap. The bigger the FVG, the bigger the dislocation and therefore a better entry level for trades.
Long Term model
This model looks at share prices over the last 12 months, captures the company’s relationship with growth, inflation, currency shifts, central bank policy etc and calculates our key results - model value, model relevance, Fair Value Gap.
The transcript for this video is available in the description on YouTube here.
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Disclosure
We use a combination of fundamental and technical analysis in forming our view as to the valuation and prospects of an investment. Where relevant we have set out those particular matters we think are important in the above article, but further detail can be found here.
Please note that our article on this investment should not be considered to be a regular publication.
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